Humber/Ontario Real Estate Course 3 Exam Practice

When reviewing the buyer representation agreement, a buyer makes several statements regarding his understanding of the form. Which one of these statements is correct?

1. Based on the wording of this agreement, I only owe remuneration if your brokerage doesn't receive remuneration from another brokerage.

2. If the home that I am interested in buying is listed by your brokerage and I am a client, then your brokerage must act impartially and equally protect both parties.

3. If I understand this form correctly, you cannot work with any other buyer clients at the same time that you represent my interests.

4. You have to show me all properties in which I am interested.

5. My agreement with you restricts you from working with any sellers directly.

6. Only one sales representative will handle all aspects of my purchase.

The correct answer is: If the home that I am interested in buying is listed by your brokerage and I am a client, then your brokerage must act impartially and equally protect both parties.

The statement regarding the representation agreement that stands out as correct is that if a home the buyer is interested in buying is listed by the brokerage representing them, the brokerage must act impartially and protect both parties. This reflects the legal principle of dual agency, which is pertinent in real estate transactions. In a situation where the brokerage represents both the buyer and the seller, the brokerage has a fiduciary duty to both parties. However, this obligation means that they must act in an impartial manner, ensuring that neither party’s interests are favored over the other. This is a crucial aspect of real estate practice, as it helps maintain fairness in the transaction, though it can lead to potential conflicts of interest that both parties should be aware of. Understanding how dual agency works is vital for buyers, as it dictates how their interests will be handled if their chosen brokerage represents parties on both sides of the transaction. For buyers, being informed that the brokerage must remain impartial can influence their expectations and help them navigate the buying process more effectively.